RUBBER 



rOMMFRCIAI. AND FINANflAI DFVFI OPA^FNT 



FROM THF TREE TO PAYMENT OF DIVIDENDS 



UPON' TMF. CAPITAL INVESTED 




W. E. SIMPSON 



The Wall Strehi Journai 

• Dow. .lotics ^ 4^0./ 

42-44 Broad Stpfji, 

NEW Y(M.'K. 



RUBBER 



ITS COMMERCIAL AND FINANCIAL DEVELOPMENT 

FROM THE TREE TO PAYMENT OF DIVIDENDS 

UPON THE CAPITAL INVESTED 

— BY — 

Wl E. SIMPSON 



PUBLISHED BY 

The Wall Street Journal 

(Dowt Sones ^ CoJ 

42-44 Broad Street, 

NEW YORK. 



OCTOBEP., 1900. 



1 



58867 



Library of Concf^i^e 

^wd Copies Keceiwc* 
OCT 5 1900 

Cofy right entry 

SffONO COPV. 

Offtvered to 

OWOER DIVISION, 

OCT 18 1900 



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CONTENTS. 



PART I— COMMERCIAL, 

CHAPTER I. 

HISTORICAL. 

Derivation of Names 1 

First Commercial Rubber 1 

Goodyear's Experiments '. 2 

Discovery of Vulcanization 2 

Earliest Manufacturers 2 

Growth and Extent of Industry 8 

CHAPTER H. 

CRUDE RUBBER. 

Indigenous Home of Rubber 4 

Producing Localities 4 

Stability of Supply 5 

United States Source of Supply 5 

Labor Situation 5 

Methods of Procuring Rubber 6 

Preparation for Market .. H 

Criide Rubber Statistics 

Crude Rubber Prices for 30 Years 7 

Exports from Para 7 

Consumption in United States S 

Preparation for Manufacture y 

CHAPTER HI. 

SUBSTITUTES AND RECLAIMED RUBBER. 

jy Prime Factors in Manufacture 10 

u Value of Substitutes 10 

. Experiments in Substitutes 11 

, Use of Reclaimed Rubber 11 



CHAPTER IV. 

BOOT AND SHOE MANUFACTURING. 

The Art of Making ir 

Process of Manufacture 12: 

' CHAPTER V. 

MECHANICAL GOODS MANUFACTURING. 

Variety of Articles Made 13 

Manufacture of Belting 13 

" Hose 14 

" " Packing 14 

" " Mats and Matting 14 

" " Valves and Gaskets 14 

" "/ Rubber Clothing 14 

" " Mackintoshes 15 

" " Carriage Clothes 15 

" Mold Goods 15 

" " Cements 15 

" " Dental and Rubber Stamp Supplies 15 

" " Dry Goods Notions 15 

" " Druggists, Stationers Sundries and other 

Mold Goods 16 

" Toys 16 

CHAPTER VI. 

RUBBER TIRE MANUFACTURING. 

Kinds of Tires Made 17 

Manufacture of Single Tube Bicycle Tires 17 

" Double Tube. Bicycle Tires 17 

" " Solid and Pneumatic Vehicle Tires 18 

" " Cushion and other Vehicle Tires 18 

CHAPTER VII. 
HARD RUBBER MANUFACTURING. 

Difference Between Soft and Hard Rubber 18 

Manufacture of Hard Rubber Articles 19 

Hard Rubber Imitations 19 

CHAPTER VIII. 
GUTTA PERCHA AND BALATA MANUFACTURING. 

\/Commercial Sphere of Gutta Percha 19 

Method of Treatment 19* 



PART II— FINANCIAL. 

CHAPTER I. 

GENERAL TRADE CONDITIONS. 

Rubber Business Financially Successful 22 

.-^Principal Companies in the Industry 22 

Stability of Industry 23 

^ Benefits of Consolidation 23 

Standardizing Product and Brands 23 

Value of Compounding 24 

^ Regular Earning Ability 24 

Prospective Increase in Consumption 24 

L^ Export Ti*ade and Foreign Conditions 25 

CHAPTER n. 

CRUDE RUBBER COMPANIES. 

System of Fixing Prices 26 

Brazillian Export Duties 26 

Buying and Selling Methods 26 

w Cx-ude Rubber Speculation 27 

/ Names of Crude Rubber Houses 27 

, Tlie Crude Rubber Company 27 

CHAPTER HI. 

BOOT AND SHOE COMPANIES. 

^ Volume of Boot and Shoe Trade 28 

• Why the United States Leads 28 

The Weather and Increase in Consumption 29 

I Concerted Management 29 

. Economies of Consolidation 30 

I The United States Rubber Company 30 

The President's Report 31 

Financial Condition 31 

The Earning Capacity 32 

Management of United States Rubber Company 32 

l/ Dividends Payments 33 

Other Boot and Shoe Manufacturers 33 



CHAPTER IV. 

MECHANICAL GOODS COMPANIES. 

^ Diversification of Product .33 

Increase in Manufacture 34 

Stability of Business 34 

Tlie Rubber Goods Manufacturing Company 35 

Officers and Directors 35 

The President's Annual Report 36 

Tlie Treasurer's Annual Report 37 

Dividend Payments 38 

Increased Earning Capacity 38 

Plan of Organization 39 

CHAPTER V. 

RUBBER TIRE COMPANIES. 

Bicycle Tire Business 39 

Vehicle Tires 39 

Consolidated Tire Company 40 

Volume of Business 40 

CHAPTER VI. 

HARD RUBBER COMPANIES. 

American Hard Rubber Company 40 

Ooodyear Vulcanite Company 41 

CHAPTER VII. 

I RECLAIMED RUBBER COMPANIES. 

Method of Conducting Business '. 41 

Principal Users of Reclaimed Rubber 41 

CHAPTER VIII. 

GUTTA PERCHA COMPANIES. 

^ Control of Trade '. 42 

Bishop Gutta Percha Company 42 



INTRODUCTORY. 

The object of this publication is to place between two 
covers, in as concise a manner as the subject will permit, such 
information as will be of use to the lay mind upon the subject 
of rubber in its various ramifications. In no sense is it the 
desire to prepare a technical treatise for the direction of those 
familiar with the rubber industry. 

The matter contained herein is primarily for the instruction 
of investors and those who are not intimately connected with 
the industry, who wish knowledge of the salient features of 
the commercial and financial development of rubber 
So far as convenient, inconsequential details are eliminated 
and controlling factors given the greater prominence. 

The subject is treated in the natural order of its develop- 
ment — from the extraction of the milky fluid from the trees 
to the payment of dividends upon the capital invested in the 
production of crude rubber and the sale of the manufactured 
product. 

The growth of the rubber industry is comparatively recent. 
In some respects it has been phenomenal, and, while the period 
of uncertainty has been passed, the commercial scope of 
rubber may conservatively be said to be in its infancy. The 
range of articles manufactured, in which rubber is used as a 
basic material, is constantly widening. Tens of thousands 
of articles are now profitably manufactured and a notable 
commentary on their success is that comparatively nothing 
in the rubber line has been offered since the inception of the 
business, which has not enjoyed a steadily increasing favor. 
As methods of production are being simplified, the tendency 
of the public grows towards greater consumption. From the 



financial standpoint probably the strongest feature of the 
stability of the industry is in its diversification. 

The information contained herein is the result of investiga- 
tion among practical men successfully engaged in the busi- 
ness. To these, the editor wishes to acknowledge the receipt 
of many favors. 

October, 1900. W. E. Simpson. 



PART I 



COMMERCIAL 



SHOWING THE METHODS OF PRODUCING AND 

MAMFACTURING CRUDE RUBBER AND 

PREPARING THE PRODUCT FOR 

MARKET. 



CHAPTER I. 

HISTORICAL^ 

DERIVATION OF NAME.— Rubber first became 
known to the civilized world when Columbus discovered 
America. He found the South American Indians using- 
rubber balls and the Spanish soldiers, who followed in his 
wake, smearing their cloaks with gum to make them water- 
proof. The first accurate description was made by a French- 
man, M. de la Condamine in 1735. Fresnau and Aublet some- 
what increased the knowledge regarding the plant, but it was 
not until 1770 that rubber was brought into commercial use. 
At this time Priestley, the English chemist, introduced India 
Rubber for effacing lead pencil marks. It is from this trivial 
circumstance that rubber derives its name ; the "India" 
coming either from the fact that it was gathered by the 
Indians of South America, or, possibly because some of the 
early importations into Europe came from India. 

FIRST COMMERCIAL RUBBER.— The first rubber 
imported into the United States reached Boston in 1800, being 
the year of the birth of Charles Goodyear, who, through his 
discovery of vulcanization, was the prime factor in giving 
rubber its present commercial prominence. In 1820, rubber 
shoes were imported into Boston from South America. 
Through a belter knowledge of chemistry, surgical instru- 
ments were made in England. Charles Mackintosh com- 
menced the manufacture of waterproof garments in Glasgow 
in 1823. From this time on experiments were freely made, 
with precarious results, until 1842 when Goodyear patented 
his process of vulcanizing by mechanical methods. 

1 



GOODYEAR'S EXPERIMENTS.— In the meantime 
patents were secured for gum elastic varnish and rubber 
shoes were m.ade by the Roxbury India Rubber Co. in 1833. 
For twenty-five years the name of (joodyear probably covers 
the development of the industry, although several other in- 
ventors are mentioned. Their results were only incidental. 
Goodyear was born in New Haven, Conn., drifted to Phila- 
delphia, where, in his early business life, he was not success- 
ful. It was as a bankrupt that he commenced investigating 
rubber. Three different times he believed he had solved the 
problem — first, when he mixed his crude rubber with mag- 
nesia; second, when he boiled this compound in quicklime 
and water, and third, when he washed the surface of this 
mixture with nitric acid. Half success in each case was soon 
turned into failure. 

DISCOVERY OF VULCANIZATION.— Goodyear's 
scientific researches availed him little in the final discovery. 
It was through a simple accident in striking a handful of 
rubber and sulphur against a kitchen stove that the secret 
of vulcanization was discovered. At this time, his entire 
circle of acquaintances had become weary of his attempts, 
and it was not until a later period that he was able to enlist 
any capital in the industry. A factory was built in Springfield, 
Mass., in 1840, where, four years later, he took out a patent 
for preparing rubber by vulcanization and began to sell 
licenses for the manufacture of various articles under his 
patents. 

EARLIEST MANUFACTURERS.— The license to manu- 
facture rubber boots and shoes-was given to Leverette Candee 
of New Haven, the founder of L. Candee & Co., a company 
v'hich has continued to the present time to be an important 
factor in the American rubber footwear industry. The license 
to manufacture rubber gloves was given to Goodyear's 
India Rubber Manufacturing Co., of Naugatuck, Conn. 

2 



Daniel Hodgman of New York, became the licensee to manu- 
facture door screens. Further licenses to manufacture boots 
and shoes were given to Ford & Co. (now the Meyer Rubber 
Co.) ; the New Brunswick Co. ; the Hayward Co. (which 
grew into the Colchester Rubber Co.) and The Goodyear's 
Metallic Rubber Shoe Co. Mechanical rubber goods then 
commenced to receive considerable attention. Clothing and 
druggists' sundries soon followed. The prosperity of the 
early rubber companies developed important patent suits, 
which were finally adjudicated in 1852. Daniel Webster was 
paid the largest fee up to that time in the history of the 
country in successfully defending Goodyear's patent. 

GROWTH AND EXTENT OF INDUSTRY.— The 
growth of the rubber industry in its early days was almost 
wholly in boot and shoes. The business began to assume 
some prominence in the early fifties. The impor- 
tation of crude rubber at Salem, Mass., where almost all of 
it arrived, in 1851, was only 334,000 pounds; in 1852, 
1,961,000 pounds; in 1854, 2,055,000 pounds. The increase 
was rapid from this time on until in 1899, 51,745,000 pounds 
were imported into the United States. In the boot and shoe 
industry in i860, the yearly output was 1,200,000 pairs, valued 
at $795,000. In the season of 1899-90, the output was 
70,000,000 pairs, valued at $35,000,000. 

The consumption of rubbfer goods has been largest 
in the United States, although England has been a close 
follovver. The Civil War gave a great impetus to the industry ; 
the government giving out large contracts for clothing, etc. 
Mechanical goods advanced rapidly in popularity shortly 
after the war. This was largely due to the increase of railroad 
building, which called for quantities of packing and 
steam hose. Rubber belting came into demand for 
mills, elevators and outdoor machinery. In fact, the rubber 
mechanical goods industry has reached enormous propor- 

3 



tions and present indications are that the increase will be 
practically constant. It is by far the largest branch of the 
trade in diversity of articles made. 

In the early 8o's, the making of rubber tires for bicycles 
became prominent. The solid tire was first used, which gave 
way to the cushion tire, which, in turn, has been superceded 
by the pneumatic tire. The solid tire for vehicles is rapidly 
becoming one of the most important branches of the rubber 
trade. 

In fifty years the rubber industry of the United States has 
grown from practically nothing, in the various branches of 
manufacture, to a value of product annually of $70,000,030. 
Through greater elftciency in manufacture, consecjuent 
economy through improved machinery and better modern 
business management, rubber is becoming more stable 
and in condition to successfully compete in foreign markets. 

CHAPTER II. 

CRUDE RUBBER 

INDIGENOUS HOME OF RUBBER.— Under the 
name of India Rubber, there are almost numberless varieties 
of gum broadly known as Crude Rubber. The proper name 
of the substance most commonly used is caoutchouc, pro- 
nounced koo-chook. This is the product of a great variety of 
trees, shrubs and vines indigenous to a belt of land in tropical 
and sub-tropical regions running round the world, where the 
temperature varies from 60 to 107 degrees Fahrenheit, and 
an average rainfall of about seven feet. 

PRODUCING LOCALITIES.— The principal grades in 
commercial use are South American, commonly known as 
"Para ;" Central American, commonly known as "Centrals ;" 
African and Indian. South America furnishes the greatest 
quantity and the finest quality. Central America grades next, 

4 



although the quantity is not so large as that produced in 
Africa, which is inferior to that produced in India. The 
United States uses the bulk of the Para rubber, while Euro- 
pean markets take the most of the African and the Indian. 
Several ^qrades of rubber reach the United States from South 
America which are necessary in the making of various quali- 
ties of goods. 

STABILITY OF SUPPLY.— The area from which crude 
rubber is now produced is so large that it will be many years 
before there will be any scarcity. The supply seems to be 
practically inexhaustible, although there is some restriction 
at times, owing to unreliable Indian labor. For this reason, 
some efforts have been made towards cultivating rubber 
trees. As it takes, however, seven years to produce rubber 
from a cultivated plant, it will probably be several genera- 
tions before the cultiv^ated article is grown in sufficient quan- 
tit}^ to supplant the natural product. 

UNITED STATES SOURCE OF SUPPLY.— South 
American rubber, in which the L'uited States is interested to 
the greatest extent, is classified at Para and Manaos in three 
grades, known as fine, medium and coarse. Para rubbers are 
divided into two principal classes, known as "Islands" and 
"Upriver," the former coming largely from islands located 
in the delta of the Amazon, while the latter is the product of 
the couijtry bordering the Amazon and its tributaries above 
Para. There are almost innumerable designations given to 
the various kinds of rubber produced, which, however, are 
not necessary to describe in a sketch of this character. For 
the purpose of giving a simple idea of the crude rubber situa- 
tion the methods in use of producing and marketing Para 
rubber are given. 

LABOR SITUATIOiN.— The territory covered by the 
Amazon River forms a watershed as large as the United 
States, exclusive of Alaska, with a population of only about a 



quarter of a million people. This will explain the difficult 
labor problem. Rubber is gathered in many different ways. 
The most common is for a family, or a number of natives, un- 
der the head of an outfitter, to select a desirable locality, 
where operations are carried on somewhat in the following 
manner : 

METHODS OF PROCURING RUBBER.— An incision 
is made in the tree from which the milky juice, or latex, is 
collected in small tin cups, the contents of which are emptied 
into a calabash or urn. A fire of brushwood is then built, 
over which a clay pot is hung. A club-shaped stick with a 
flattened clay mould on the end is repeatedly dipped into the 
bucket of milky juice and turned in the smoke until a big 
ball of crude rubber is formed. This is taken off by breaking 
the clay mould and shaking out the pieces. This produces 
what is known as a "bottle." This process evaporates the 
water; kills all substances wliich decompose or ferment, and 
absorbs the oxidized resin. Lower grades are created b)^ 
imperfect fumigation and the mixing together of scrapings, 
residues, etc. There are several other systems of fumigating 
and coagulating rubber. In some instances palm nuts are 
used to produce a thick smudge. This smoke has been found 
to contain acetic acid and creosote — the latter being a well- 
known preservative of rubber. 

PREI'ARATION FOR MARKET.— The bottles and 
bundles of rubber are purchased from the gatherer by trad- 
ers who transport the product to Para or Manaos, where 
middlemen or warehousemen cut the bundles into strips to 
determine quality. "Biscuits" weighing from 8 to 60 pounds 
are then packed in wooden boxes, in which form it is ex- 
ported. 

CRUDE RUBBER STATISTICS.— The statistical devel- 
opment of the crude rubber business, with special reference 
to the American conditions, is given in the following tables: 

6 



I 



CRUDE RUBBER PRICES FOR 30 YEARS. 





COMPARATIVE 


: RATES OF FINE 


PARA. 


TOTALEXPORTS 

FROM PARA. 
PARA WEIGHTS. 




•LIVERPOOL. 


NEW YORK. 




s. d. 


s. 


d. 








1870 


2 8 to 


3 


8 


$0 80 to 


$1 07 


10,528,000 Hjs. 


I87I 


2 8 to 


3 


I 


72 to 


80 


12,768,000 '■ 


1872 


3 li to 


3 


4 


68 to 


87 


IT, 200.000 '■ 


1873 


2 5 to 


3 





64 to 


80 


14,890,000 " 


1874 


2 2^ to 


2 


8 


5^ to 


75 


14,234,000 *'' 


1875 


2 I to 


2 


5 


58i to 


67i 


15,144,000 •' 


1876 


2 2 to 


2 


4i 


57i to 


64 


14,490,000 " 


1877 


I ii-| to 


2 


3i 


48^ to 


60 


16,148,000 " 


1878 


I 8 to 


2 


I 


40 to 


52i 


17,618,000 " 


1879 


2 to 


4 





48 to 


I 00 


17,600000 " 


1880 


3 to 


3 


9 


65 to 


92 


18,889,000 " 


I88I 


3-1 to 


3 


9 


74 to 


91 


20,174,000 " 


1882 


3 5i to 


4 


II 


82 to 


I 20 


22,730,000 " 


1883 


4 8 to 


3 


loi 


I 15 to 


95 


22,033,000 " 


1884 


4 to 


2 




48 to 


98 


24,274,000 " 


1885 


2 3 to 


2 


8 


54 to 


65 


29,310,000 " 


1886 


2 6 to 


3 


6 


60 to 


83 


30,793,000 ' 


1887 


3 6 to 


2 


Hi 


83i to 


68^ 


31,393,000 " 


1888 


2 10 to 


3 


3 


67 to 


78 


33,000,000 " 


1889 


2 7 to 


3 


I 


60 to 


73 


34,900,000 " 


1890 


2 io| to 


4 


I 


66 to 


I 00 


36,300.000 " 


I89I 


2 5 to 


3 


7i 


60 to 


95 


39,200,000 '■' 


1892 


2 8 to 


2 


II 


62I to 


74 


41,274,000 " 


1893 


2 ID to 


3 


3 


64 to 


29 


42,068,000 " 


1894 


2 9 to 


3 


I 


64^ to 


73 


40,870,000 " 


1895 


3 oi to 


3 


4i 


70 to 


8ii 


46,363,000 " 


1896 


3 to 


3 


9 


70 to 


85 


47,366,000 " 


1897 

1898 


3 5 to 
3 6 to 


3 
4 


9i 

4i 


79 to 
81 to 


89* 
I 06* 


49,786,000 " 
48.204,000 " 


1899 


1 3 iq| to 


4 


7i 


92 to 


I 12 


56,824,000 ■' 



CONSUMPTION OF INDIA RUBB^ER BY THE 

UNITED STATES AND CANADA. 

All in Pounds. 



Imports to United States 

Exports to Liverpool and 

Continent 



Add Stock on Jan. ist . . 

L,ess Stock close of year 
Deliveries to Manuf't's 



1882. 
24,141,000 

626,000 



23,515,000 
736,000 



24,251,000 
2,153,000 



22,098,000 



1883. 
21,625,000 

1,060,000 



20,565,000 
2,138,000 



1884. 
24,064,000 

585.000 




23,479,000 

2,742,000 



22,703,000 I 26,221,000 
2,742,000 I 2,997,000 



19,961,000 



23,224,000 



Imports to United States 

Exports to Liverpool and 

Continent 



Add Stock on Jan. ist . . 

Less Stock close of year 
Deliveries to Manuf't's 



1885. 

24,871,000 

331.000 


1886. 
29,351,000 

260,000 


1887. 
29,193,000 

450,000 


24,540,000 
. 2,997,000 


29,091,000 
2,879,000 


28,743,000 
3,808,000 


27.537.000 
2,879,000 


3 1 ,970,000 
3,808,000 


32,551,000 
3,748,000 


24,658,000 


28,162,000 


28,803,000 



Imports to United States 

Exports to Liverpool and 

Continent 



Add Stock on Jan. ist . . 

Less Stock close of year 
Deliveries to Manuf't's 



1888. 

30,362,000 
600,000 


1889. 

28,989,000 
260,000 


1900. 

31,949,000 
517,000 


29,762,000 

3,748,000 


28,729,000 
3,610,000 


31,432,000 
1,669,000 


33,510,000 

3,610,000 


32,339,000 

1,669,000 


33,101,000 
2,822,000 


29,900,000 


30,670,000 


30,279,000 



Imports to United States 

Exports to Liverpool and 

Continent 



.Add Stock on Jan. ist 

Less Stock close of year 
Deliveries to Manuf't's 



I89I. 

36,180,000 
2,200,000 


1892. 
34.348,000 

1,100,000 


1893. 

36,780,000 
1 ,600,000 


33,980,000 

2,822,000 


33,248.000 
2,435,000 


35,180,000 
2,725,000 


36,802,000 

2,435,000 


35,683,000 

2,725,000 


37,905,000 

2,322,000 


34,367,000 


32,958.000 


35,583,000 



Imports to United States 

Exports to Liverpool and 

Continent 



Add Stock on Jan. ist . . 

Less Stock close of year 
Deliveries to Manuf't's 



1894. 

32,797,000 
875,000 


1895. 

36,250.000 

725,000 


1896. 

31,506,000 
1,100,000 


31,922,000 
2,322,000 


35,525,000 

3,182,000 


30,406,000 
1,251,000 


34,244,000 
3,182,000 


38,707,000 
1,251,000 


31,657,000 

1,411,000 


31,062,000 


37,456,000 


30,246,000 



Imports to United States 

Exports to Liverpool and 

Continent 



Add Stock on Jan. ist . . 

Less Stock close of year 
Deliveries to manuf't's 



1897. 
38,879,000 

550,000 



38,329,000 
1,411,000 



39,740,000 
1,639,000 



1898. 
42,115,000 

350,000 



41,765,000 
1,639,000 



43,404,000 
1,121,000 



38,101,000 j 42,283,000 



1899. 
51,745.000 

575,000 



51,170.000 
1,121,000 



52,291,000 
i,666,oco 



50,525,000 



PREPARATION FOR MANUFACTURE.— The prep- 
aration of crude rubber for manufacture differs in method 
accordino^ to tlie article for which it is mtended. In a o-op.cral 
M^ay, the first process is to soak the crude rubber in hot water 

9 



for the purpose of softening. It is then masticated in specially 
contrived machinery, after which it is washed for the purpose 
of removing all foreign substances. After being treated by 
the macerating machine and cleansed, it is sheeted out in 
thin sheets and hung up to dry, usually with artificial heat. 
All traces of moisture are ehminated and tlie rubber refined 
by running it between 'lot cylinder rollers, bringing the 
whole to the required consistency. It is then compounded^ 
preparatory to vulcanization and adaptation for specific ar- 
ticles. 

CHAPTER III. 

SUBSTITUTES AND RECLAIMED RUBBER^ 

PRIME FACTORS IN MANUFACTURE.— Pure 
rubber may be properly describefl as the basic material in 
the manufacture of rubber goods. The essential ingredient 
in making it durable is sulphur. The mixing of rubber and 
sulphur in variable proportions, according to the result de- 
sired, and submitting them to intense heat, or vulcanizing it^ 
fits the material for commercial use. This mixture, however,^ 
is only suitable for a comparatively limited number of articles. 
It therefore becomes necessary to introduce other sub- 
stances, such as oil, whiting, reclaimed rubber, etc. 

VALUE OF SUBSTITUTES.— In the literal sense, there 
is no substitute for rubber. The introduction of so-called 
substitutes into pure rubber is for the purpose of providing 
certain qualities which are necessary for the manufacture of 
the great majority of rubber, articles and not contained in 
rubber in its pure state. Substitutes are also used to cheapen 
the cost of manufacture. The prominent substitutes are made 
from oxidized oils, principally linseed, rapeseed, cottonseed, 
mustard, peanut or corn oils. The two so-called substitutes 
mostly used are known as black and white. The black is 

10 




made by boiling oil with sulphur and the white by treating 
oil with chloride of sulphur. The use of these substitutes 
tend to preserve rubber and resist acid. 

EXPERIMENTS IN SUBSTITUTES.— When rubber 
and substitutes are mixed they have the faculty of softening 
or dissolving each other, allowing the whole to cure into 
smooth goods. Many experiments have been made with 
various chemical combinations, and earnest investigations are 
being conducted with fibres of various plants, such as Ramie, 
to find a perfect substitute for rubber, but none have as yet 
stood all the necessary tests. Persistent research is more than 
Hkely to develop an equivalent to rubber, although consider- 
able time must elapse before perfection of manufacture is se- 
cured and the article made popular. 

USE OF RECLAIMED RUBBER.— There is more re- 
claimed rubber used in the manufacture of rubber goods in 
the United States than so-called substitutes. This is because 
it is easier and cheaper to get than compounding substitutes, 
and, for the purpose for which it is used, it is much better. 
If it were not possible to use reclaimed rubber, the price of 
crude rubber would be very much higher as 25^0 to 30% 
of the total product of manufactured goods may be said to 
be the result of its use. The method or procedure is to masti- 
cate old boots and shoes, and reduce them to a state approach- 
ing powder, then pass the whole over magnetic plates, to ex- 
tract metals, then through a machine to shake out the dirt. 
The mass afterwards goes into a big vat, where it is boiled 
in an acid solution thereby destroying the fibre. After the 
fibre has been removed in a washing tub, the material goes, 
to a drying room and then to a mill where it is refined. 



U 



CHAPTER IV. 

BOOT AND SHOE MANUFACTURING. 

THE ART OF MAKING.— There is probably no busires 
m which skill of a higli order is as necessary in the manu- 
facture of product as in the rubber industry. Patents on 
formulae and secret compounds are not considered of prime 
importance. In fact, individual natural talent is of the high- 
est importance. Rubber of apparently the same grade varies 
much in quality, requiring modifications of the usual formulas 
and great judgment as to time in vulcanizing. The instincVive 
knowledge of cookery is the relative ability required in rubber 
■compounding. 

PROCESS OF MANUFACTURE.— The compounding 
room is the most important part of a rubber factory. The 
essential additions to rubber in the manufacture of boots and 
shoes are sulphur and litharge. After the rubber has been 
milled, it is siii)nutted to the compounding process and the 
various ingredients put into a mill with the rubber where all 
are kneaded into one composite substance. That which is 
intended for uppers, after being compounded, is run through 
another mill called a calendar, where a sheet of cotton fabric 
is combined with the rubber forming a sheet of rubber cloth. 
The rubber for soles is run through another calender which 
turns it out marked with the pattern of the sole. These are 
the two principal parts, although the ordinary rubber shoe 
consists of seven or eight different parts, while twenty-three 
parts are necessary in the composition of a rubber boot. x\ll 
the additional parts are run through their proper calendars, 
after which the various pieces are cut out, usually by hand. 
The various pieces are then put together over a smooth last, 

12 



the boot or shoe varnished and revulcanized for seven or 
eight hours at a temperature of 260 Fahrenheit. The product 
is then ready for market. 

CHAPTER V. 

MECHANICAI. GOODS MANUFACTURING. 

VARIETY OF ARTICLES MADE.— The general name 
of mechanical goods as used in the rubber industry covers 
something over 10,000 articles almost wholly made of soft 
rubber. While there are some articles used in mechanical 
lines made of hard rubber, the process in manufacture is so 
completely different that articles used for mechanical pur- 
poses made from hard rubber are placed in a class with sta- 
tionery's supplies and some kinds of druggists' sundries. 
Clorhing is made by manufacturers engaged in the mechanical 
gr.ods business because soft rubber is combined with the 
cloth. In volume of business, belting, hose, packing, mats 
and matting, valves, gaskets, tubing and mold goods, in the 
order given, are the notable articles made under the head of 
mechanical goods. The great diversity of the product multi- 
plies to a considerable extent the methods of manufacture in 
secret compounds, patents and machinery. 

Crude rubber as used in the manufacture of mechanical 
goods is prepared in the same way as for boots and shoes 
until it reaches the compounding stage. 

MANUFACTURE OF BELTING.— The basis of 
strength in belting is cotton duck frictioned with rubber in 
the calenders. Belting is made in various plies. The inner 
plies are simply frictioned, or coated, with rubber, while the 
two outer plies are frictioned and then passed through the 
calenders and afterwards coated. It is then taken to a fold- 
ing machine and after being folded a strip is put on. The last 
ply envelopes the ends of the others. The belting is then 

13 



stretched and placed in a hydraulic press, where it is sub- 
mitted to the required degree of heat, governed by the quality 
of the belt, at a pressure of 1800 pounds. 

MANUFACTURE OF HOSE.— The usual way of mak- 
ing seamless hose is to friction the duck the same as in belt- 
ing, forcing the whole through a tubing machine, like run- 
ning lead through a die, to the diameter required, and thert 
running the mass on a pole 52 feet in length. All hose is. 
made 50 feet long. Rubber is then put on in a sheet, the 
whole being placed in heaters and vulcanized by machinery. 
Hand labor is sometimes used, but at greater cost. 

PACKING.— The whole operation of making packing is 
from the calenders. The frictioned duck and rubber sheeting 
are placed together to the right thickness and vulcanized be- 
tween hydraulic plates. 

MATS AND MATTING.— Mats and matting are run 
from the calenders of proper thickness, then put into a press, 
in molds and vulcanized. In fact, the calenders almost 
complete the operation, except vulcanizing. 

VALVES AND GASKETS.— Valves, gaskets and like 
goods are made principally through hydraulic pressure and 
vulcanization in molds according to the shape desired. 

RUBBER CLOTHING.— As in the manufacture of all 
other goods, in which rubber is the basic material, experience 
in manipulating the ingredients is the important feature irt 
making rubber clothing. This is modified according to the 
aesthetic feature of the trade and as fashions vary. The cal- 
endered, or what is commonly, known as the all rubber coat, 
is the big article of commerce in the clothing line, although 
ponchos, a rubber blanket used by horsemen, and mackin- 
toshes are important branches. Most of the work of 
making the all rubber coat is done on the calender, where 
duck is frictioned and coated. It is then cut into patterns and 

14 



made up by hand. For service the calendered, or rubber 
surface clothing, where the rubber is driven into the meshes 
of the fabric under heat and pressure, is considered the best. 

MACKINTOSHES.— Mackintoshes are made by a 
spreading process. The rubber is reduced to a liquid state by 
naptha and churning. It is then spread on the fabric by 
placing the fabric to be covered between hot cylinders, where 
a knife is pressed down close enough to the surtface of the 
cloth to allow the liquid to pass under. This is done probably 
ten times, the result being that a very thin coat of rubber is 
pressed into the cloth, leaving it flexible. 

CARRIAGE CLOTHES.— In carriage clothes, after cal- 
endering, the goods are grained on embossing rolls, var- 
nished, and run into a dry heat. 

MOLD GOODS. — The usual equipment of rubber ma- 
chinery utilized in making mold goods which belong either 
to the mechanical or druggists' sundries lines, is added to 
through special appliances for filling and emptying molds. 
A wide field for experiment in compounds is probably the 
principal feature. 

CEMENTS. — Hundreds of different formulas are used in 
making cements used in leather shoes, bicycles and other 
manufactured rubber articles, according to the stickiness, 
waterproof quality and cheapness necessary. Crude rubber 
is mixed as in the general rubber business and made into a 
solution in churns. 

DENTAL AND RUBBER STAMP SUPPLIES.— Un- 
vulcanized crude rubber for dentists and rubber stamp makers 
is compounded, but cured and finished by the dentist or stamp 
manufacturer. 

DRY GOODS NOTIONS.— In the manufacture of no- 
tions, such as dress shields, children's aprons, waterproof 
dress bindings, the principal feature is in deodorizing so that 

15 



objectionable smells are done away with, otherwise the goods 
are manufactured by the usual dry process. Special machines 
for forming and caring the goods in their particular shape 
are also necessary. 

DRUGGISTS', STATIONERS' AND OTHER MOLD 
GOODS. — Druggists' surgical and stationers' sundries, such 
as water bottles, air pillows, cushions, bandages, stationers' 
rubber bands, erasers, etc., require somewhat more skillful 
manipulation in manufacture than in other rubber lines. In 
a general way, these articles are either made by hand from 
the calendered sheet — partly in mold and seamed by hand — 
or, in mold altogether and vulcanized and submitted to pres- 
sure where necessary. The distinct feature in making hollow 
work, such as balls a*nd bulbs, is in inflating the general shape 
of the mold, while it is being cured in open steam heat, with a 
few drops of water or ammonia, which swells under the heat 
developed to perfect the shape and give the proper surface 
both outside and inside. The coloring of rubber in these 
articles is also important, as no trace of lead must be left. 
The whites, blacks, reds and other colors must be mixed in 
separate mills with the greatest care. 

TOY MANUFACTURE.— Toys are made in much "The 
same manner as other mold goods, except that a larger pro- 
portion of hand labor is necessary. The rubber toy business 
is a larger branch abroad than in the United States, as they 
are more generally used in foreign countries. While some 
toys are manufactured in the United States, the saving in 
labor abroad is quite sufifiicient to offset a greater develop- 
ment in the United States. 




CHAPTER VI. 

RUBBER TIRE MANUFACTURING. 

KINDS OF TIRES MADE.— The rubber tire business 
may be divided into two general classes — bicycle and vehicle. 
Two general styles of 'bicycle tires are made known as single 
and double tube. In vehicle tires, there are three principal 
kinds; solid, cushion and pneumatic. Although the vehicle tire 
business is in its infancy, the volume amounts to many thou- 
sands of dollars. But two kinds are generally used, broadly 
known as solid and pneumatic. 

SINGLE TUBE BICYCLE TIRES.~The manufacture 
of bicycle tires is being conducted along firmly established 
lines. The process of manufacture in both the single and 
double tube during the preparatory stages, is about the same 
as in clothing. The fabrics are frictioned, rubber run on, 
and then placed on forms which shape the tire. In the mak- 
ing of single tube tires, the forms are removed and the tube 
filled with air and water. The process of vulcanizing is to 
heat the water to the point of generating steam, thereby creat- 
ing a high pressure and forcing the rubber against the sides 
of the mold. This process expands the rubber to fit the mold 
perfectly and leaves a smooth surface on the outside. 

DOUBLE TUBE BICYCLE TIRE.— The outer tube of 
the double bicycle tire is built on an endless mandrel. After 
the tire is vulcanized, it is sliced on the inner periphery and 
the ring removed. The inner tube is made in lengths of 
proper measurement, after the manner of hose, except that 
the ends are closed. The inner tube is then inserted in the 
outer tube, or shoe, which latter is then laced up. 

17 



SOLID AND PNEUMATIC VEHICLE TIRES.— The 
solid vehicle tire is made by the simple process of mixing 
the prepared compound, forcing it into shape through a 
tubing machine and molding it in steam heat. This tire is 
fastened on the wheel by electrically welded wires. The 
pneumatic vehicle tire is built in much the same manner as 
ihe bicycle pneumatic tire, except that the construction is 
much heavier. 

CUSHION AND OTHER VEHICLE TIRES.— The 
cushion tire is also made in a great variety of forms. Prob- 
ably one of the most serviceable is a modification of what 
might strictly be termed a cushion tire. It is a sort of com- 
bination of the solid and pneumatic tires. A thick wall of 
rubber is used, which is built of frictioned rubber, carefully 
vulcanized and coated with the highest class of rubber. The 
diameter of the air chamber is about one-third the thickness 
of the walls, making it difficult to puncture and yet stable 
enough to stand up under the weight and not break the rim 
of the wheel. 

CHAPTER VII. 

HARD RUBBER MANUFACTURING. 

DIFFERENCE BETWEEN SOFT AND HARD RUB- 
BER. — The manufacture of hard rubber articles differs prim- 
arily in the treatment of crude rubber after it has been 
cleansed and macerated. A larger proportion of sulphur is 
used than in soft rubber and a more intense heat required. 
For a long time the rule was to use two pounds of rubber with 
one pound of sulphur, subjected to a heat of over 300 degrees 
Fahrenheit for several hours. As the business developed, 
however, many compounds were introduced, so that almost 
any degree of quality, hardness, or price is now provided. 

18 



According to the result desired, the compound is made be- 
fore vulcanization, and the article vulcanized in molds ; or, 
the article made after vulcanization by turning on lathes and 
machinery used similar to that in hardwood working. 

HARD RUBBER ARTICLES.— The principal articles 
are combs, druggists' sundries, valves, surgical instruments, 
etc. The chemical action of crude rubber and sulphur mixed 
in the proper proportions, and subjected to a high degree of 
temperature, is to make a black horn colored substance, 
which will take a hig'h polish. Hard rubber is colored by 
dusting the crude material with the finely powdered coloring 
desired or enameling by rolling the coloring matter into the 
material. Hard rubber scrap is devulcanized and remixed in 
the cheaper grades of goods, although where elasticity and a 
high grade is needed, it is not used. 

HARD RUBBER IMITATIONS.— There are many 
counterfeits of -hard rubber, which are made of cellulose, 
gums and animal, vegetable and earthy matters. These do 
not, however, meet the service for which hard rubber is best 
adaptable. Like Gutta Percha, these counterfeits are often 
mistaken for hard rubber, because they look like ebony. 

CHAPTER VIII. 

GUTTA PERCHA AND BALATA MANUFACTURING. 

COMMERCIAL SPHERE OF GUTTA PERCHA.— 
Gutta Percha and Balata is in no sense a substitute or counter- 
feit for India rubber. Not only is the cost of Gutta Percha 
prohibitive, but it contains qualities which give it a distinct 
classification. The supply of Gutta Percha comes from the 
Malay Peninsula and Island of Sumatra and is gradually 
growing less — due to imperfect methods of gathering. 

METHOD OF TREATMENT.— Gutta Percha is ^rst 
treated by coagulation, chiefly through exposure to air and 

19 



cleansed mechanically by passing- through specially con- 
structed machines, or chemically by submitting it to suitable 
solvents. In many respects Balata, coming from an entirely 
different plant, the Bullet Tree, is a substitute for Gutta 
Percha, although it is more generally used as an adulterant 
in the making of Gutta Percha articles. The most important 
application of Gutta Percha is for submarine and subter- 
ranean cables and golf balls. Surgical instruments and bot- 
tles for holding corrosive acid and caustic alkalies are made 
because of the antiseptic qualities of both Gutta Percha and 
Balata. Submarine cables are made in screw presses in which 
the wires are covered with a seamless material. Gutta Percha. 
hardened by the extraction of its resin, is used in the manu- 
facture of golf balls. As the specific gravity of the material 
is low, it will float in water and through proper treatment 
almost any degree of elasticity can be made. The capacity 
for compounds in Gutta Percha and Balata are reduced ia 
the minimum. 



1 



20 



PART II 



FINANCIAL 



SHOWING THE FINANCIAL DEVELOPMENT OF 
THE INDUSTRY; THE COMPANIES EN- 
GAGED THEREIN AND THEIR 
EARNING ABILITY. 



21 



-^ ' " CHAPTER I. 

GENERAL TRADE CONDITIONS. 

RUBBER BUSINESS FINANCIALLY SUCCESSFUL 
— There is no doubt of the earning abiHty o'f rubber manufac- 
ufacturers. In fact, since the days of early experiments and 
incomplete results, there has not been a failure in the rubber 
business in the United States which is not clearly traceable 
to mismanagement of the grossest kind. In the beginning 
success depended mainly upon patents and the energy dis- 
played in introducing the new product. As the business is 
now conducted its success is the simple result of conservative 
management, and progress in the art of manufacturing. 

PRINCIPAL COMPANIES IN THE INDUSTRY.— So 
far as the general investing public is concerned, there are but 
two principal companies engaged in the business. These are 
the United States Rubber Co., which almost exclusively man- 
ufactures boots and shoes and the Rubber Goods Manufac- 
turing Company, which makes the bulk of mechanical goods 
and druggists' surgical and stationers' sundries, clothing, bi- 
cycle and vehicle tires. These two companies do not conflict 
in their trade or financial relations in any manner. The 
causes governing the success of either does not necessarily 
affect the earning capacity of the other. For a clear under- 
standing of the financial conditions surrounding the invest- 
ment of capital in any branch of the rubber industry, it is 
therefore advisable to enumerate the specific advantages and 
disadvantages in each of the principal companies. The status 
of the companies engaged in other and quite as important 

22 



branches of the industry is briefly described for the purpose 
of indicating the comparative importance of the companies 
of larger capitalization. ] 

STABILITY OF INDUSTRY.— There are specific influ- 
ences which operate in favor of the rubber business in all its 
branches. Probably the education of the masses as to the 
adaptability of rubber is responsible for greater energy in de- 
veloping new articles for consumption. The increased diver- 
sification of articles manufactured, which have become both 
popular and profitable, is shown in the fact that the rubber 
industry has been particularly free from labor troubles ; and 
this, in the face of the improvements in machinery and the 
consequent relative decrease in the amount of hand labor 
employed. 

BENEFITS OF CONSOLIDATION.— Another import- 
ant factor, which is giving renewed impetus to the trade is 
the consolidation of interests engaged in similar lines of man- 
ufacture. Not only are the ordinary economies of consolida- 
tion conserved, such as administration, sales and patents, but 
a remarkable advancement in efficiency in manufacture is the 
result. This is due to the fact that the manipulation of rubber 
in manufacture has not yet been reduced to the basis of an 
exact science. The lack of uniformity in the quality of crude 
rubber as at present gathered, makes it necessary that special 
skill be developed in attaining fixed results, while the various 
materials utilized are in process of manufacture. 

STANDARDIZING PRODUCT AND BRANDS.— 
The individual mixer uust not only have an intuitive sense,. 
but years of experience. This results in keeping the product 
up to a standard quality, and, to a very large extent, gives 
value to brands. As a rule, the chief value in the brand of any 
manufactured article is in the capital invested in intelligent 
advertising. This not only applies to the rubber business. 

23 



n 



but must be augmented by the ability to keep the article pro- 
duced upon an even plane of efficiency or the brand immedi- 
ately loses its value. 

VALUE OF COMPOUNDING.— There is no danger 
that the supply of crude rubber or raw material will become 
so short as to cause prohibitive prices in the manufacture of 
the product. The area in which rubber producing trees and 
plants grow is so large that the source of supply can hardly 
be exhausted in many hundreds of years at the present ratio 
of increase of demand. The price of the best grade of crude 
rubber known as fine Para has ranged from 40 cents to $1.15 
per pound in the last thirty years. This price has varied ac- 
cording to the conditions surrounding the gathering of the 
material and not as the result of an increase in the consump- 
tion of the goods manufactured. The advancement in the art 
of compounding has so greatly reduced the cost of the pro- 
duct that even the highest prices for crude rubber could pre- 
vail without injury to the earning capacity of the companies 
engaged in the business. 

REGULAR EARNING ABILITY.— The general busi- 
ness conditions prevailing in the United States are not likely 
to greatly influence earning ability in times of depression as 
so many articles are made of an economical nature that in 
times of restriction rubber products are more likely to be 
used. Rubber footwear is cheaper than leather shoes and 
the introduction of rubber in mechanical lines has proved to 
be economical. The enormous increase in the use of rubber 
tires is. also permanent and economical. In fact, no substi- 
tute is at present available in competition with rubber for any 
purpose for which it has as yet been used. 

PROSPECTIVE INCREASE IN CONSUMPTION.— 
In point of consumption of manufactured rubber articles, the 
■following countries rank in the order named : United States, 
Germany, Russia, England, Italy, Canada, Norway and 

24 



Sweden and Japan. Since the inception of the rubber business, 
the United States has led in the consumption of shoes, tires, 
belting, hose and other mechanical goods. It is a notable 
feature of the business that where rubber has been introduced 
it has rarely been supplanted by any other material because 
of its adaptability and economy. When rubber tires, cloth- 
ing, boots and shoes, horse shoes, packing, insulation and all 
articles for personal comfort or medicinal purposes are once 
used they are always used. With the march of civilization 
and opening up of new territory and the consequent intro- 
duction of water works, electrical apparatus, etc., new fields 
are available. 

EXPORT TRADE AND FOREIGN CONDITIONS.— 
As the result of concentrated effort, through the general con- 
solidation of interests in the principal rubber lines, 
the exportation of goods to foreign countries is be- 
ginning to show an appreciable increase. The ofificial 
figures show that for the nine months ending April 
I, 1900, the ratio of increase was 37^ per cent. 
In countries where rubber is manufactured, the increase in 
the exportation of the American article is not likely to be so 
great, owing to the cheaper labor abroad, which, however, 
is largely offset by the decreased cost in manufacture in the 
United States through the use of improved machinery and 
the better compounding system which prevails. Up to the 
present time, the production of rubber goods has not been 
suf^ciently increased to warrant competition for foreign busi- 
ness. The growth of the business in this country, however, 
• is such at the present time that the most satisfactory results 
are being obtained through the introduction oi rubber articles 
at reasonable profit in countries like South America, Africa, 
Australia, Mexico and the Far East. On the other hand, 
foreign competition in the United States markets is of no 

importance. 

Information is given of the companies engaged in various 

25 



branches of the rubber industry in the order of their pre- 
cedence for convenience of reference in point of manufacture 
a^nd estabhshment. 

CHAPTER II. 

CRUDJB RUBBER COMPANIES. 

SYSTEM OF FIXING PRICES.— There is nothing par- 
ticularly unusual in the method of buying a^nd selling crude 
rubber as conducted by the principal concerns in this coun- 
try. The United States, England and Germany are the con- 
trolling factors in determining prices. The visible supply of 
crude rubber is very well known at all times. The statistics 
of crude rubber in South America, Africa and Central 
America ; the amount afloat out of these countries to Ant- 
werp, Liverpool and New York ; and the stocks held at the 
various receiving ports are accurately known each month. 
From this basis the price is gauged. Where there is an ex- 
cess demand in any of the principal markets the price is modi- 
fied plus transportation and duties, if there be any. In the 
United States crude rubber is admitted free under a liberal 
definition of the tariff on milled rubber. 

BRAZILIAN EXPORT DUTIES.— In a broad sense, 
the United States depends for its supply of rubber upon the 
product of Brazil ; England from South America and Africa, 
while Germany secures the great bulk of its product from 
the Congo Free State, Central America, and, partially from 
South America. The Brazilian government charges an ex- 
port duty at Para of 23.815% on the official value, which 
covers the government, state and municipal taxation on crude 
rubber. 

BUYING AND SELLING METHODS.— The traffic in 
crude rubber in the United States is in no sense governed 

26 



by any trust, pool or other agreement, either as to methods 
of buying in Para or Manaos, or in extraordinary facilities 
for selling to consumers. The various companies and firms 
engaged in the business purchase crude rubber in South 
America either through agents, brokers, or warehousemen. 
No special means of transportation are employed. Steamers 
are chartered in the usual way whether buying in the South 
American or Continental markets. When crude rubber is 
received in New York, its sale is governed by the demand. 
The price is fixed according to the ability of the individual 
seller to supply the precise grade and quantity desired. The 
statistical tables published in Chapter IL, Part I., give the 
range of prices and exports from Para for thirty years and 
consumption with United States for eighteen years. 

CRUDE RUBBER SPECULATION.— The speculative 
feature in buying and selling crude rubber is reduced to a 
minimum, although attempts have been made from time to 
time to control the market on the part of inexperienced man- 
ipulators, which have resulted in loss due to the breadth of 
the crude markets. 

NAMES OF CRUDE RUBBER HOUSES.— The prin- 
cipal companies engaged in the crude rubber business in the 
United States, named in the order of volume of business 
transacted are : 

Crude Rubber Co., 30 Broad St., N. Y. City. 

The New York Commercial Co., 290 Broadway, N. Y. City. 

Geo. A. Alden & Co., Boston. 

Reimers & Co., 61 Pine St., N. Y. City. 

Otto G. Mayer & Co., 44-8 Cedar St., N. Y. City. 

Lawrence Johnson & Co., Philadelphia. 

In addition, there is a class of individual brokers, while cer- 
tain manufacturers buy their product through agents located 
at Para and Manaos. 

THE CRUDE RUBBER COMPANY.— The Crude Rub- 
ber Company is capitalized for $1,000,000, and has a surplus 

27 



of $400,000. This company handles about three quarters of 
the Crude Rubber business in the United States. The com- 
pany was first started in 1869, incorporated in August, 1897, 
and has gradually increased in growth. The officers are 
Henry Earle, president and general manager : P. de Lacey 
Lieberman, treasurer and secretary. The securities of the 
companies are not listed and are closely held. The New York 
Commercial Company is a close corporation and no state- 
ment concerning its affairs is available for publication. The 
other concerns engaged in the business are co-partnerships. 

CHAPTER HI. 
BOOT AND SHOE COMPANIES. 

VOLUME OF BOOT AND SHOE TRADE.— In a 
sense, the growth of the companies engaged in the manufac- 
ture of rubber boots and shoes is equivalent to the history of 
the whole rubber industry of this country. The problems 
of vulcanization, compounds and machinery were first worked 
out in the effort to make boots and shoes. The perfection 
of this particular branch of the rubber business has been 
greater than in any other. The volume of product consumed 
is larger than in any other rubber article. The business has 
grown from an annual output in i860 of $795,000; in 1870, 
to $8,000,000 ; in 1880 to $16,000,000 ; in 1890 to $24,000,000. 
At present the annual output is $35,000,000. In 1895, an ag- 
gregate capital of $20,000,000 was invested in the rubber boot 
and shoe manufacturing business; 15,000 workmen em- 
ployed and 40,000,000 pairs of boots and shoes produced. The 
present capital invested in the industry is $55,000,000, and 
the annual output of boots and shoes 70,000,000 pairs. 

WHY THE UNITED STATES LEADS.— The United 
States has greatly outstripped Europe in the manufacture of 

28 



rubber boots and shoes. There has been a greater incentive 
for making inventions and improving machinery, due to the 
greater cost of labor in the United States ; secondly, the great 
body of the working people in this country are better able 
to afiford the luxury of rubber footwear. In Europe, rubbers 
are only worn by the well to do ; here they are worn by every- 
one — the yearly average consumption being a pair of rubbers 
to every other person. Probably the most important reason 
however, is that rubber boots or shoes are the cheapest and 
most economical form of footwear. 

THE WEATHER AND INCREASE IN CONSUMP- 
TION. — Owing to the nature of the product, weather condi- 
tions have a great deal to do in determining the volume of 
consumption. The season's business begins about the first 
of April, when price lists are issued and discounts fixed 
for the fiscal year's trade. Blanket orders are then taken for 
delivery according to the particular needs of the purchaser. 
With a long severe Winter, the sale of the product is largely 
increased ; but the normal increase in the shoe business for 
the past ten years has probably been io% over and above 
the consumption caused by the natural increase in popula- 
tion. The average of increase fluctuates according to weather 
conditions. 

CONCERTED MANAGEMENT.— Before there was 
concerted effort on the part of the larger manufacturers, re- 
sulting in the organization of the United States Rubber Com- 
pany, there was considerable loss through attempts to intro- 
duce odd and undesirable patterns, as well as other injudi- 
cious forms of competition. As the industry became special- 
ized and gravitated towards a better form of management, 
economy in manufacture became an enormous item. The ex- 
perience of the most skillful manufacturer was utilized for the 
benefit of the whole, while a more uniform system of selling 
greatly benefited the industry. 

29 



ECONOMIES OF CONSOLIDATION.— It has not de- 
veloped that the bringing together of these great interests- 
under one management has advanced the price of the product 
in a greater ratio than is legitimately warranted by the fluc- 
tuations in the cost of crude material. On the contrary, the 
business has become more stable with a tendency towards 
giving greater value to consumers. As the volume of the 
rubber business increases, the ability to utilize reclaimed 
rubber becomes an important item. Reclaimed rubber can be 
devulcanized and used very freely at a cost of from 13 to 15. 
cents per pound as against Para rubbers at from 55 to $1.00- 
per pound. 

THE UNITED STATES RUBBER CO.— The United 
States Rubber Company is the largest factor in the rubber 
boot and shoe business in the United States. It controls 80% 
of the business. The company is capitalized under the laws- 
of New Jersey for $50,000,000, divided equally between 8% 
non-cumulative preferred and common stock. The officers 
are Frederick M. Shepherd, President ; James B. Ford, Vice- 
President; Charles R. Flint, Treasurer; H. M. Sadler, As- 
sistant Treasurer ; Samuel P. Colt, Secretary. The directors- 
are: E. S. Converse, Samuel P. Colt, H. E. Converse, 
Charles R. Flint, James B. Ford, J. Howard Ford, Robert 
M. Galloway, Henry L. Hotchkiss, Charles L. Johnson,. 
Lester Leland, Frederick C. Sayles, Frederick M. Shepherd, 
Charles Stewart Smith, John D. Vermeule, George E. Weed 
and Samuel N. Williams. The executive committee is com- 
posed of Frederick M. Shepherd, Henry L. Hotchkiss, James 
B. Ford, Charles R. Flint, Samuel P. Colt, John D. Vermeule,. 
Charles L. Johnson and Lester Leland, 

New Jersey Headquarters — Brunswick, N. J. 

General Offices— 9— 15 Murray St., N. Y. 

Registrar — ^Central TrusFCompany. 

Transfer Offices — 9 — 15 Murray St., N. Y. 

30 



THE PRESIDENT'S REPORT.— The President, in his 
last annual report, dated May 15, 1900, in part said: "The 
business of the year presents some remarkable features. In 
the mid-Winter, it appeared that perhaps the amount of sales 
would be smaller than those of the previous year. But the 
total result proved the contrary and the business has been 
most satisfactory. The loss by bad debts during the year is 
also remarkable in that it amounts to less than one-hun- 
dredth of one per cent, of the total sales, a most gratifying 
evidence of the prosperity of the trade with which we have 
dealings. The relations between the company and the em- 
ployees in the manufacturing department and with customers 
continue harmonious and friendly." 

FINANCIAL CONDITION.— The balance sheet, show- 
ing the condition of the company's business, March 31, 1900, 
compared with the previous year is as follows: 

Assets. 

Mar. 31, 1900. Mar. 31, 1899. 

Cash $628,630.84 $557,666.79 

Notes and accounts receivable 1,887,506.78 1.799, 155-88 

Merchandise on hand 1,394,019.73 1,617,609.85 

Investments 46,961,836.05 46,910,508.78 

$50,871,993.40 $50,884,941.30 

Liabilities. 

Preferred stock $23,525,500.00 $23,525,500.00 

Common stock 23,666,000.00 23,666,000.00 

Accounts pavable 1,417,094.75 1,711.263.50 

Due companies for goods sold 253,015.04 217.634.84 

Balance • • $2,010,383.61 $1,764,542.96 

Reserved for dividends in 

April and July 1,177,680.00 941,020.00 

Surplus $832,703.61 $823,522.96 

31 



THE EARNING CAPACITY.— The income account for 
the year ending March 31, 1900, follows: 

Surplus March 31, 1899 $823,522.96 

Profits from operating plants and 

dividends on investment $2,246,030.42 

Net income froim commissions on 

sales of goods 987,743.19 

Total income $3,233,773.61 

Less total expenses 225,886.07 

3,007,887.54 



$3,831,410 50 
DIVIDENDS.— On preferred stock: 

Paid Oct., '99 $476,510 

Paid Jan., '00 470,5io 

To be paid April, '00. 470,510 
To be paid July, 00. 470,510 



On common stock : 

Paid July, '99 $236,660 

Paid Oct., '99 236,660 

Paid Jan., '00 236,660 

To be paid April, '00. 236,000 



1,882,040.00 



946,640.00 
Total dividends •. $2,828,680.00 



$1,032 730 50 
Charged for depreciation in losses 170,026.89 

Surplus $832,703.61 

The undivided earnings in the treasuries of the 
manufacturing companies in which this com- 
pany has investments after charging off for 
depreciation, are now $2,689,367.81 

The books and accounts from which the treasurer's reports 
were made up were certified to by chartered accountants. 
Upon the basis of a $100,000 subscription to the underwriting 
in 1892, there has been paid over 9 per cent, in dividends, 
and an original subscription for that amount shows an addi- 
tional profit of over $20,000. 

MANAGEMENT OF UNITED STATES RUBBER 
COMPANY. — As at present constituted, the company is or- 

32 > > . :. 



gani/erl upon the basis of maintaining the individuahty of the 
subsidiary companies The standard required is fixed at ihe 
level of the best and it is the policy to bring the product of the 
whole to that standard. The consolidation of ownership of 
securities of the various companies has effected important 
economies in making fewer brands and adopting the best of 
the standard styles. Only the most modern plants are oper- 
ated to their greatest capacity. Selling methods are also made 
more uniform, resulting in a more effective system of less ex- 
pense. 

DIVIDEND PAYMENTS.— Dividends are declared 
quarterly and paid in January, April, July and October. 

OTHER BOOT AND SHOE MANUFACTURERS.— 
The United States Rubber Company is in no sense a mon- 
opoly. There are a number of companies in the different 
parts of the United States, making various grades of goods. 
Among these are the Hood Rubber Company, Boston, Mass.,. 
Mishawaka Woolen Company, Mishawaka, Ind., the Grand 
Rapids Felt Boot Co., Grand Rapids, Mich., the Apsley Mfg.. 
Co., Hudson, Mass., the Byfield Rubber Company, Bristol. 
R. I., George Watkinson & Co., Phila., Bourn Rubber Com- 
pany, Providence, R. I., Monarch Rubber Company, St. 
Louis. Mo. and the Beacon Falls Rubber Co., Beacon Falls, 
Mass. 

As the securities of the above companies are not actively 
traded in and public financial statements not made, their finan- 
cial condition cannot be shown. 

CHAPTER IV. 

MECHANICAIi GOODS COMPANIES. 

DIVERSIFICATION OF PRODUCT.— The mechanical 
goods business first showed a substantial development some 
twenty years after the firm establishment of the rubber boot 
and shoe business. The great diversification of product. 



however, is largely responsible for its subsequent and rela- 
tively more rapid development. As railroad building- in- 
creased and manufacturing- in other lines grew, the sources 
of consumption for mechanical goods multiplied. The great 
bulk of mechanical articles used, therefore, are manufactured 
in this branch of the industry. 

INCREASE IN MANUFACTURE.— A few years ago 
the greatest increase in the manufacture of mechanical goods 
was in belting, packing, hose, mats, tubing, valves, etc. All 
these have been placed upon a well defined basis. Probably 
the articles which are now showing the greatest increase in 
manufacture and consumption are bicycle and vehicle tires. 
It remained for companies engaged in making mechanical 
goods to develop this class of goods. It is fair to assume, 
however, that its growing magnitude will specialize the manu- 
facture of tires in due season. The tendency seems to be, in 
fact, to arrange the manufacture and sale of all kinds of rubber 
goods, so that when specific articles become more than or- 
dinarily prominent, another branch of the trade is created for 
the sake of efficiency and economy. 

STABILITY OF BUSINESS.— The degree of success of 
the mechanical goods branch of the rubber industry depends 
upon the general business conditions of the whole country. 
The immense diversification of the product is its strongest 
feature. This class of product is a necessity in almost every 
line of business. There is probably not one manufacturer in 
the country but who uses rubber goods in some form and his 
consumption gradually grows to larger proportions. It 
would be difficult tomake any rehable estimate of the volume 
of output in the various mechanical goods lines because of 
the many ramifications of the trade. The increase, however, 
is much above the natural increase from consumption due to 
greater population. The business is essentially one of great 
detail and capable of many economies, owing to greater ex- 

34 



perience in compounding, perfection in machinery and es- 
tablishment of brands, which latter is highly important as a 
brand in the rubber business is synonomous with a special 
grade of goods. 

THE RUBBER GOODS MANUFACTURING COM- 
PANY. — The Rubber Goods Manufacturing Company prob- 
ably controls 85% of the mechanical goods business in the 
United States. The company is organized under the laws 
of New Jersey, with an authorized capital of $50,000,000.00, 
equally divided between common stock and 7% cumulative 
preferred stock. The success of the consolidation of this 
company is best evidenced in the fact that the first year's busi- 
ness showed an increase of over $400,000 in excess of the net 
profits estimated at the time of the formation of the company. , 

OFFICERS AND DIRECTORS : The directors and offi- 
cers of the company are as follows : C. S. Smith, president ; 
U, D. Eddy, vice-president; W. B. Flint, treasurer, and W. 
A. Towner, assistant treasurer and secretary. Directors : 
Charles Stewart Smith, Charles R. Flint, F. W. Morgan, L. 
K. McClymonds, G. W. Blanchard, R. L. Edwards, Ulysses 
D. Eddy, George W. Hebard, Alvah Trowbridge, C. H. Dale, 
Henry Steers, Alden S. Swan, William M. Ivins, Wallace B. 
Flint and Percy Chubb. Executive Committee : Charles R. 
Flint, chairman; W. M. Ivins, G. W. Blanchard, C. H. Dale, 
L. K. McClymonds, G. W. Hebard, F. W. Morgan. General 
Counsel: W. M. Ivins. 

New Jersey Headquarters — Jersey City, N. J. 
Registrar — United States Mortgage & Trttst Company. 
Transfer Agents — Baring. Magoun & Co. 

THE PRESIDENT'S ANNUAL REPO'RT.— The first 
annual report of the company's business is as follows : 

35 



PRESIDENT'S REPORT. 

New Brunswick, N. J., February loth, 1900. 
To the Stockholders of the 

Rubber Goods Manufacturing Company : 
Reviewing the general business and conditions of the com- 
pany, in conformity with the By-Laws, the President reports 

as follows : 

This company was incorporated January 26th, 1899, and 

organized March 17, 1899. The properties, which were ac- 
quired at the outset, were as follows : 

Ninety-one per cent, of the Capital Stock of the Mechanical 
Rubber Company, which owns : 

(a) The plant of the Chicago Rubber Works, at Chicago, 
Illinois. 

(b) The plant of the Cleveland Rubber Works, at Cleve- 
•land, O. 

(c) The plants of the New York Belting and Packing Co.,. 
(i) at Passaic, N. J., and (2) at Sandy Hook, Conn. 

(d) The plant of the Fabric Fire Hose Company at War- 
wick, N. Y. 

(e) The plant of the Stoughton Rubber Company at 
Stoughton, Mass, 

Seventy-five per cent, of the Capital Stock of Morgan & 
Wright of Chicago, 111. 

The entire capital stock of the Peerless Rubber Manufac- 
turing Company of New York. 

The entire capital stock of the India Rubber Company of 
Akron, O. 

There has since been acquired : 

Eight and three-quarter per -cent, of the Capital Stock of 
the Mechanical Rubber Company. 

The entire capital stock of the Sawyer Belting Company of 
East Cambridge, Mass. 

The entire Capital Stock of the Hartford Rubber Works- 
Company, of Hartford, Conn. 

36 



The entire Capital Stock of the IndianapoHs Rubber Com- 
pany of Indianapolis, Ind. 

The entire Capital Stock of the Peoria Rubber & Manufac- 
turing Company of Peoria, 111. 

Negotiations have been completed for the transfer to the 
Rubber Goods Manufacturing Company of the entire Capital 
Stock of the iVmerican Dunlop Tire Company of Belleville, 
New Jersey, and arrangements have been about completed 
for other valuable properties and contracts which will mater- 
ially increase the earning capacity of the company. 

The Rubber Goods Manufacturing Company has no in- 
debtedness and the By-Laws forbid any bonded or mortgage 
debt to be created without the consent of the holders of two- 
thirds of the preferred shares, as well as of the holders of a 
majority of the general or common stock. 

The Treasurer's Report of the financial condition of the 
company, as of February loth, 1900, and of the operations 
for the fiscal year is appended. 

The officers and directors of the company congratulate the 

stockholders on this showing. 

Respectfully submitted, 

Charles Stewart Smith, 

President. 

TREASURER'S REPORT. 
The following balance sheet shows the condition of the 
company February 10, 1900: 

ASSETS. 

Cash $318,246.72 

Accounts receivable 765.589-51 

Net earnings of properties ac- 
quired prior to 
November 1,1899 $1,409,421.87 
Less amount re- 
ceived to date... 852,124.83 

■ 557.297-04 

Investments 22,129.732.28 



Total $23,770,865.55 

37 



LIABILITIES. 

Preferred stock. . .. : $7,621,300 

Common stock 15,134,600 

Total $22,755,900.00 

Surplus $1,014,965.55 

W. B. FLINT, Treasurer. 
INCOME AND DIVIDEND ACCOUNT. 
Net income received to February 10, 1900. . . . $798,438.26 
Dividends paid on preferred stock: 

June 15th, 1899 if per cent 

Sept. 15th, 1899 if per cent 

Dec. 15th, 1899. ... . .if per cent 

Total 340,769.75 

Available for dividends $457,668.51 

Balance of earnings reserved 557,297.04 

Total surplus $1,014965.55 

W. B. FLINT, Treasurer. 

In addition to the net earnings of $1,409,421.87, herein- 
before stated, the interests acquired since November ist, 
1899, have made a profit to December 31st, 1899, as esti- 
mated, of $60,000. 

DIVIDEND PAY^,IENTS.— The company has paid reg- 
ular dividends of if per cent, quarterly on preferred stock 
and commenced quarterly payments of i per cent, on the 
common. Dividends are declared quarterly, and paid Jan- 
uary, April, July and October. 

INCREASED EARNING CAPACITY.— Since the time 
of the annual report, several important additions have been 
made to the earning capacity of the company. The most 
prominent of these has been through contracts with the Amer- 
ican Bicycle Company, the Consolidated Tire Company, and 
other concerns for the sale and manufacture of rubber tires. 
As a partial result of the new arrangement, directors of the 
company on June i, 1900, authorized the following memoran- 
dum regarding the company's financial affairs. 

38 



Profits year '99 $1,409,421 

Preferred stock, dividends and expenses 549.779 

Balance of earnings undivided $859,642 

Deduct amount set aside for dividends on preferred 

and common stock (paid July 16) 284,835 

Net balance undivided earnings year 1899 574,807 

The earnings for the first six months of 1900, ending June 
30, were $1,208,487, leaving a surplus June 30. after paying 
all expenses and dividends on the preferred and common 
stock of over $1,750,000. 

PLAN OF ORGANIZATION.— The organization and 
management of the Rubber Goods Manufacturing Company 
is unique in comparison with consolidations in other indus- 
tries. 

The individuality of the subsidiary companies is main- 
tained both in the competitive and manufacturing sense. This 
engenders a spirited rivalry in the sale of goods and con- 
stantly breeds new business. The paramount factor, how- 
ever, is that the best individual ability is fixed as the standard 
for all resulting in greater benefit to the whole system. 

CHAPTER V. 

RUBBER TIRE COMPANIES. 

BICYCLE TIRE BUSINESS.— The bicycle business has 
passed through its primary stages into a well established in- 
dustry. The product is manufactured and sold almost ex- 
clusively by the companies which are controlled by the Rub- 
ber Goods Manufacturing Company. The feature of the busi- 
ness, which gives it the greatest stability, is the popularity of 
brands. 

VEHICLE TIRES.— The manufacture of solid vehicle 
tires is also well established upon well defined lines. There 
are opportunities for improvement and experiment, however, 

39 



in the auto tire field, as new conditions, are to be met 
in heavier vehicles. This business is very large at present^ 
but is bound to grow to enormous proportions. 

CONSOLIDATED TIRE COMPANY.— This company 
makes a specialty of solid tires. It is not a manufacturing 
company, but sells the product of other factories through 
special contracts. The company is capitalized at $8,000,000. 
On December 31, 1899, a statement was made showing an ex- 
cess of current assets over current liabilities of $781,428. The 
chief assets of the company consist of good will, patents, cash 
on hand, as the result of profits, and goods carried in stock. 

The Grant patent, commonly known as the Kelly Tire, is 
the chief patent owned. This form of tire is made, however, 
by a number of companies. This company is by far the larg- 
est handler of tires in the country. 

VOLUME OE BUSINESS.— The total tire business of 
the country may be fixed at about $12,500,000 annually. Of 
this, bicycle tires are sold to the amount of $7,500,000; solid 
vehicle tires, $4,000,00; Pneumatic Vehicle Tires $1,00,000 
and cushion tires about $100,000. The principal companies 
which make tire are Morgan & Wright, Hartford Rubber 
Tire Company, Goodrich Rubber Company, India Rubber 
Company, Akron, O., Diamond Rubber Company, Akron, 
O., Goodyear Rubber Company, New Brunswick Tire Com- 
pany, The Buckeye Rubber Company, is building a factory, 
at Akron, O. 

CHAPTER VI. 

HARD RUBBER COMPANIES. 

AMERICAN HARD RUBBER COMPANY.— The total 
biisiness done in hard rubber product in the United States is 
about $2,500,000, of which the American Hard Rubber Com- 
pany, composed of the India Rubber Comb Company, the Rut- 

40 



land Hard Rubber Company and the Goodrich Hard Rubber 
Company, control about three-quarters. The Goodyear Vul- 
canite Company produces about one-fifth of the total output. 
The great bulk of the Hard Rubber business is in electrical 
insulation, combs, surgical and stationers' supplies. There 
is an actual increase in the development of the business and 
little or no prospect of competition from foreign interference 
on account of an import duty of 30%. As the American Hard 
Rubber Company and the Goodyear Vulcanite Company are 
practically limited copartnerships, statements of their financial 
condition are not available. 

CHAPTER \n. 

RECLAIMED RUBBER COMPANIES. 

METHOD OF CONDUCTING BUSINESS.— The Re- 
claimed rubber business of the United is one of the most im- 
portant in the industry. Practically the same conditions that 
control crude rubber operate in reclaimed rubber. The busi- 
ness is carried on by firms which handle the reclaimed rub- 
ber or scraps such as boots and shoes, belting, etc., which 
is first collected through junk shops. The price is fixed on 
the basis of supply and demand. The business has become 
so important that a standard system of packing and grading 
of material has been established. 

PRINCIPAL USERS OF RECLAIMED RUBBER.— 
The companies which handle the greatest quantities of re- 
claimed rubber are as follows : United States Rubber Com- 
pany, Loewenthal Rubber Company, Philadelphia Rubber 
Works, Mechanical Rubber Company, Boston Rubber Shoe 
Company, Bloomingdale Rubber Works, Raymond Rubber 
Company, Diamond Rubber Company, Trenton Rubber 
Manufacturing Company, Empire Rubber Manufacturing 
Company, E. H. Clapp Rubber Comapny, United States Rub- 

41 



ber Reclaiming Works, B. F. Goodrich Company, New York 
Belting & Packing Co. Limited, Joseph Stokes Rubber Com- 
pany, Boston Woven Hose & Rubber Co., New Jersey Rub- 
ber Company, Crescent Belting & Packing Company, Dan- 
versport Rubber Company, Lake Shore Rubber Company. 

CHAPTER VHP 

GUTTA PERCHA AND BALATA COMPANIES. 

CONTROL OF TRADE.— England controls the Gutta 
Percha business of. the world through its better facilities in 
the manufacture of cables. Cables and golf balls are the 
principal products of manufactured articles made from Gutta 
Percha and Balata. The supply of Gutta Percha is so re- 
stricted that the price of the raw material seems to be too 
high to increase its use. On the contrary, the manufacture 
of Gutta Percha articles seems to be decreasing. 

BISHOP GUTTA PERCHA COMPANY.— Probably 
the most important element at present in the Gutta Percha 
business is the contemplated building of the Pacific Cable, 
which, if it happens, is more than likely to advance the price 
of Gutta Percha. This would prohibit its use and a rubber 
compound be used in its place. The principal company en- 
gaged in the Gutta Percha business in this country is the 
Bishop Gutta Percha Company established in 1847, which 
manufactures cables, insulated wires and other Gutta Percha 
goods. No statement of this company's affairs is publicly 
made. 



42 



OCT 5 1900 



